Here’s what I’ve discovered over my 4 year journey to financial peace.

Being broke doesn’t mean you’re broken

“I’m broke,” you’ll say, and you’ll hang your head and feel terrible. According to most people, being broke is the ultimate form of not having your sh** together. Running out of money means running out of life, energy, and opportunities.

We feel bad about being broke because we associate our financial situation with who we are as people. Our self worth is tied too closely to our net worth.

But you’re not defined by the size of your bank account. A rich jerk is just a jerk who happens to have money. But a compassionate person who’s broke is still compassionate; they might not have much money at the moment, but they’re still quite valuable.

Our resistance to financial change is built on shame

The heart of all money stress is rooted in shame. We feel ashamed that we struggle with money. We feel ashamed that we can’t afford to live like our peers. We feel ashamed in our inability to save even a penny for our future. It’s exhausting.

In my talk with Kyle Naylor, he described shame as one of the most destructive forces in our lives. It leads to depression, self-doubt, inaction, and many other negative physical and emotional effects.

But our positive money changes come from forgiving ourselves for past money mistakes and not letting shame dictate our actions. We’re all in need of positive financial changes and we’re all capable of making them happen. And that’s nothing to be ashamed of.

Money habits reflect our life habits

We’re not the size of our bank accounts, but we are what we choose to do with those bank accounts. If we hoard our money, we’re hoarders; if we give it away, we’re givers; if we want more, we’ll take more until the well runs dry. The habits we build around our money are the habits that define our lives.

Money is so intricately interwoven with every other aspect of our lives that when we take a stand to make a difference with our life, it has an organizing effect on our relationship with money, and when we take a stand to make a difference with our money, it has an organizing effect on every other part of our life.

So when we develop healthy money habits, we’ll develop healthier life habits as well.

Money management is a craft that can (and must) be learned

Most people approach new financial habits like they would a diet plan: they start on a Monday, quit their habits cold-turkey, find themselves growing restless by Wednesday evening, and accept defeat by Friday morning.

Money changes must be adopted slowly, and money management must be approached for what it is: a skill that can and must be learned through research and experimentation. Read a personal finance book, listen to a personal finance podcast, or seek out a reliable financial advisor. Just don’t fall for quick changes; in the world of money, that leads to being scammed, losing more money, or simply developing more destructive habits.

Take the time to learn how to manage money the right way. The investments you make in your financial education will pay for themselves.

Financial peace comes not from frugality or extravagance, but from balance

Ultra frugality creates misers; ultra extravagance leads to a joyless life; the spot in between is where you find financial peace.

When my wife and I paid off our debt and began looking to the future, we planned for the route of ultra frugality — we’d give up everything to save every penny we could.

And for what? We didn’t know.

We had a few vague goals in mind to fuel our ultra saving, but we knew that those goals didn’t align with our true passions in life.

While we’d love the opportunity to retire early (and we’re still on a path to do so), we’re already living a life of happiness by striking the balance of frugality and extravagance. We save most of our income, but we dine out often and love traveling throughout the year. We have business ideas, non-profit/charitable goals, and an extensive list of life quests to complete, none of which are cheap.

We live with balance, we’re happy, and we’ve achieved financial peace.

So remember: you’re not defined by the size of your bank account, but instead, what you do with that bank account; if money mistakes come along, embrace them and seek opportunities to learn how you can avoid those mistakes in the future; lastly, find balance in your financial life, and you just might find financial peace.